'Serious mismanagement' led to sale and temporary closure of Grangewood Independent School, inquiry finds
PUBLISHED: 07:22 19 August 2019 | UPDATED: 07:22 19 August 2019
A Forest Gate school was sold and temporarily shut by a trustee who operated alone and "without considering the consequences", the Charity Commission has found.
A statutory inquiry into the Grangewood Educational Association - which runs Grangewood Independent School - was launched last year following serious concerns about the charity's governance. The school was set up 40 years ago to provide a Christian education for two to 11-year-olds and is now operating as normal.
It found that the charity should have been operating with three trustees, but had on several occasions been inquorate - lacking the required number of trustees to make a decision.
This included in 2014, when the charity entered a company voluntary arrangement following a period of financial difficulty, and the decision was made by the sole trustee to sell the school's Chester Road premises the following year and then lease it back.
In March 2018, parents were contacted about the school's anticipated impending closure as a result of "financial constraints".
That was also during a time when the school only had one trustee, folliwng the death of one in December 2017 and the resignation of another in February 2018.
The investigation found that the sole trustee had commissioned an educational advisor's report, which that same month concluded that the charity would be insolvent by December 2018.
The commission was notified of the school's intended closure on March 14, 2018 - 12 days after parents had been told. At this point, there were 45 children on the school's register.
The investigation revealed: "No provision had been made by the trustees for parents to identify other schools for their children to attend."
As a result, on March 28 - what was intended to be the last day of the school's operation - a group of parents began an occupation of the building.
The investigation found that the trustee had "instructed legal advisors to act for the charity who then pursued an interim possession order against the parents who were still in occupation".
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During the process of these legal proceedings, the advisors contacted the Charity Commission requesting that it authorise the action - which was when the commission stepped in to appoint interim managers to oversee the charity's running. These were replaced in October by three new trustees.
The investigation also highlighted how "breakdown in communication between the sole trustee and the business manager led to conflict that had a negative effect on the running of the school".
It found that a loan of £5,000 was paid to the sole trustee and then used to settle the trustee's own debts.
The charity's financial records show that the three trustees in post during 2016 and 2017 received £31,905 in expenses, but these were not recorded in the accounts.
The commission concluded that there had been "serious mismanagement and/or misconduct" and that the sole trustee "acted in haste when making decisions relating to the closure of the school, without considering the consequences of those actions on the charity beneficiaries".
The report added: "The sole trustee admitted to the inquiry that he did not have an understanding of the responsibilities of the role of a trustee and the legal and administrative responsibilities that are involved in this role."
He formally ceased to be a trustee in July 2018 when his directorship of the charitable company ended and he was not re-appointed.
The trustee has undertaken to not accept a trusteeship for a charity or any charities for a period of ten years from this date.
Amy Spiller, head of investigations team, said: "The Grangewood community were treated poorly, by the inadequate way this charity was managed and how decisions were taken. The sole trustee, who should not have made decisions alone, failed in his responsibilities to the charity and let the school community down.
"We took action to support the reopening of the school and protect the charity from suffering further harm, and we're satisfied it has now made the significant changes to its governance needed, but it should not have taken this level of disruption to pupils, families and staff for this to happen.
"The public rightly hold charities to high standards, and trustees as the custodians of charity, have a responsibility to ensure that they carry out their duties with care and skill."
Grangewood has been contacted for comment.